By: Christopher Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, MA
A Health Care Provider Defense and Compliance Firm

In a rare but increasingly important application of the False Claims Act (FCA), the U.S. Department of Justice (DOJ) has intervened in a whistleblower lawsuit against ProMedica Health System, Inc. and its affiliates, alleging they provided grossly substandard or entirely worthless care at four skilled nursing facilities across Pennsylvania, Ohio, South Carolina, and Virginia. This aggressive enforcement underscores a critical message: health care providers, regardless of size or tax status, risk FCA liability not just for overbilling, but for failing to provide the quality of care Medicare and Medicaid are paying for.

What Makes This Case Stand Out?

The complaint in United States ex rel. Compton v. HCR ManorCare, Inc., et al. marks a striking use of the FCA’s “worthless services” theory. The government alleges that from 2017 through 2023, these facilities systematically failed to provide:

• Individualized care plans
• Adequate wound care for pressure ulcers
• Required bathing and hygiene services
• Assistance with feeding, resulting in malnutrition and extreme weight loss

Perhaps more egregiously, the DOJ contends that in some cases, facility staff falsified medical records to document services that were never delivered. Under federal law, submitting claims for nonexistent or grossly deficient services may constitute fraud.

A Legal and Compliance Wake-Up Call for All Provider Types

Although this case involves skilled nursing facilities, the implications reach much farther. Any healthcare provider billing federal programs, whether behavioral health, physician, outpatient rehab, DME suppliers, or rural health centers, can be held liable under the FCA for:

• Failing to meet basic standards of care
• Delivering care so substandard that it’s deemed worthless
• Falsifying documentation to cover non-performance
• Systematic under-staffing that prevents delivery of promised services

In other words, quality of care isn’t just a clinical issue, it’s now squarely in the DOJ’s fraud and abuse enforcement playbook.

Takeaways for Non-Hospital Health Care Providers

Even if you’re not operating a skilled nursing facility, this case should compel you to:

• Audit Your Documentation: Are your records accurate reflections of care provided? If it wasn’t done, don’t document it.
• Staff Appropriately: Understaffed facilities, especially those billing per-diem or flat rates, invite scrutiny if care cannot be delivered as billed.
• Train Your Workforce: Reinforce with staff the consequences of charting care that wasn’t rendered. This includes medical assistants, CNAs, counselors, and techs.
• Implement a Quality Monitoring Program: If you’re billing for services that are supposed to achieve a therapeutic goal (e.g., IOP, SUD treatment, wound care), ensure your outcomes reflect that.
• Respond Promptly to Complaints: A trail of unresolved internal complaints about care deficiencies can be a whistleblower’s dream.

Final Thoughts

The worthless services doctrine is still relatively rare in FCA litigation but that’s changing. In the behavioral health, substance use, physical therapy, and outpatient settings, quality failures, if systemic, can and will trigger DOJ investigations. Providers must understand that failing to deliver federally paid services with appropriate quality is not just a clinical lapse, it can become a federal case. Contact Parrella Health Law at 857.328.0382 or email Chris directly at cparrella@parrellahealthlaw.com.